Hall of Fame

Roger Ferguson

CEO ,
TIAA

Roger Ferguson’s interest in finance was sparked by his father. He has worked for Davis Polk & Wardwell and McKinsey & Co., and has served as vice chairman of the Federal Reserve. He is now chief executive of TIAA, a nonprofit financial services firm that manages $1 trillion in assets.

How did you get into finance in the 1980s?

My interest started when I was very young. My father was a child of the Depression, and that got him interested in finance. We talked about it a lot around the dining room table—that’s one of my primary memories from my junior high years. But my first job in finance was as a lawyer at Davis Polk & Wardwell, working with the big underwriters, like Goldman Sachs and Morgan Stanley. I moved from there to McKinsey & Co. in the 1980s, advising financial companies.

And then you joined the Fed.

I was appointed to the Federal Reserve Board of Governors in 1997. It had interested me since I was a teenager. In 1966 President Lyndon Johnson nominated Andrew Brimmer to be the first black governor on the Federal Reserve. He was the first person who looked like me getting that job. Seeing him on the front page of The Washington Post was very exciting. I became vice chairman in 1999.

There’s a Wall Street Journal article from the week the Nasdaq peaked in 2000 in which you warned investors to pay attention to risks in the market. What would you say today?

I would always give that speech. Look, in good times, frothy times or bad times, paying attention to risk is important. It’s wise to remember that markets don’t always go one way.

After 9/11, you advocated for cutting interest rates quickly.

It’s true. I thought showing the Fed was willing to shore up the economy, not just markets, was an important signal. A big part of the Fed’s job is controlling expectations. When I was at the Fed, I worked a lot to make sure our words were clear and the markets understood where we stood.

What happened after the Fed?

I left in 2006 and joined Swiss Re. People forget, but Swiss Re was the first major financial services firm to have any losses associated with subprime mortgages. It was a relatively small amount in the latter half of 2007, but that got me thinking something was going on that might prove detrimental. A few months later, I got a call from an unidentified New York number and did something unusual: I decided to answer it. It was an executive recruiter asking if I’d be interested in becoming the next CEO of TIAA.

How did the financial crisis affect TIAA?

There were some obvious challenges, but the company has a long history of really good risk management. We had no material amounts of subprime—that’s the phrase my lawyers want me to use. We exited before the crisis hit.

Minorities rarely held jobs in finance when you started and still rarely hold leadership roles. Why?

First, frankly, there is some bias in business that has persisted longer than other places. Secondly, people are comfortable working with people who look like them. Remember how excited I was to see Andrew Brimmer’s photo in The Washington Post? Finally, there is the issue of financial literacy. In my upbringing, we had lots of conversations about financial matters, but data show African-Americans and Hispanics have lower levels of financial literacy than others. Put it together and it’s a challenge to get more African-Americans and Hispanics into finance and leadership positions.

The president frequently criticizes the Fed. Does that worry you?

There have been moments of very explicit pressure in the past. Richard Nixon put an awful lot of pressure on Arthur Burns to keep rates low. Johnson did the same thing to William McChesney Martin. So it’s not unheard of. But we’re not used to this sort of pressure on the Fed, because presidents since Clinton haven’t done it. There is a long history of independence at the Federal Reserve, but protection is going to come in large part from senators, congressmen and the American populace expecting the Fed to be as apolitical as possible.

In your career, what was the best decision you made?

My best decision was to stay in school until I was 30. I have a law degree and a Ph.D. in economics. In most of the roles I’ve taken, I’ve felt reasonably comfortable about the basic groundings. There’s always been something to learn, but I think my education has in every place created a good bedrock.

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